Typical Result Case Study
The 16,000 employees of a health system received a 20% cost savings with enhanced coverage for Accident, Critical Illness and Hospital Indemnity through VOYA.
Projected
- Premiums $2,200,000
- Expenses (40%) $880,000
- Ceded Premiums (60%) $1,320,000
- Claims (50%) $1,100,000
Actual
- Premiums $2,200,000
- Expenses (40%) $880,000
- Ceded Premiums (60%) $1,320,000
- Claims (30%) $660,000
Projected Distributions $220,000
Actual Distributions $660,000
Takeaways:
- Claims experience was much lower than underwriting had anticipated.
- With all upside going to the employer’s Health & Welfare fund, low loss ratios benefit the employees instead of the insurance industry.
Ancillary Leverage Case Study
An insurance company attempted to leverage the Life & Disability to block client from leveraging the BeneRe program for voluntary benefits. Instead, client moved all the ancillary business to VOYA, BeneRe’s fronting carrier. Employees received significant savings, improved coverage and will capture the upside of future dividends.
Projected
- VB Premiums $1,900,000
Actual
- Premiums $1,900,000
- Life & Disability Prem.’s $19,000,000
Total Premiums $1,900,000
Total Premiums $20,900,000
Takeaways:
- Employer refused to be bullied into bundling to drive value for employees.
- Employees received a significantly better value proposition as a result of employer’s strong fiduciary convictions.
New Coverage Case Study
Consultant for jumbo employer placed their client’s new VB program representing 40,000+ employees with VOYA / BeneRe for 1/1/20.
Client’s HR, Legal and Finance groups all reviewed and bought into the program. The major questions raised were:
“What are we missing here?” & “Why wouldn’t everyone do this?”
Projected for 1/1/20
- Premiums $3,500,000
Actual
- Premiums $4,000,000
Takeaways:
- Advantage of a strong communication strategy to complement the e-enrollment.
- Should place Accident, Critical Illness and Hospital Indemnity coverage directly after the medical program in the enrollment order. They provide significantly more coverage than dental and are infinitely more important than vision “coverage”.
Roll Over Case Study
If company with $1.2MM of premium for the full year were to join the captive off-cycle at the end of Q1, $900K would be their ceded premium for captive participation. This pro-rata amount would be used to calculate their dividend for the year.
Projected (Full Year)
- Yearly Premium $1,200,000
- Expenses (40%) $480,000
- Ceded Premium (60%) $720,000
- Claims (30%) $360,000
Actual (Partial Year)
- Pro-Rata Premium $900,000
- Expenses (40%) $360,000
- Ceded Premium (60%) $540,000
- Claims (30%) $270,000
Projected Distributions $360,000
Actual Distributions $270,000
Takeaways:
- Off-cycle rollovers into the BeneRe group captive can easily be accommodated through the first 9 months of the year.